Cross Border Resources, Inc. (XBOR)

[downsideup]

Thanks.

Debt free is good. I'll think it particularly useful if they have, in fact, eliminated the convertible notes that were clearly still there as a risk in the last quarterly. I didn't get the numbers from that last quarterly to add up, along with all the other news, to get them all the way to completely "debt free"... so, will still need to see what it is that the next one says. Looks like it shouldn't be an overly long wait for it from here, at least ?

Given the current economy and market risks, I'd generally rather see the company be generating enough cash that they can remain "largely" debt free for now... while avoiding the risks of excess leverage that might be applied against the assets in the case things do get worse. Doesn't mean a little bit of debt, if it could easily be serviced even at lower oil prices, if that enables getting and holding a much big value in a new asset, is something I'd see as a show stopper.

It would still obviously be useful for them to have some sort of a lending facility available. I'll want to see my junior oil companies leveraging up at some point, probably not too far off... when the money is both available and affordable... and prior to the point where the potential for inflation becomes a risk that is being realized. When the inflationary risks (instead of the current deflationary pressures) start to result in real accelerations (as seems likely) in inflation... then you want to see they already have that fixed bit of leverage in place... fully applied against producing assets while oil prices are rising.

DRLY seems it "might" be working in a timely fashion to be in the right position with most of the right things lined up at the right time...

Still have to see more of what it is that they've got...

Asset quality matters...

My basics in DD are pretty straightforward...

I want to see what the assets are, and see what they are worth... and, I want to see proofs that the assets they claim to own are in fact quite solidly attached to the ownership of a share.

Then, I'll want to see that they have the management skill and ability, if not the proven experience and track record, that suggests they should be able to put the assets to work without wasting a lot of time or $$$, and come out well ahead of where they started as a result...

Sounds pretty simple... but, at this end of the market, that isn't as common a combination as you might hope.

It gets more complex, too, because I don't want to see proprietary claims about the scope of the potential value... rather than independent evaluations, along with a description of the geology, paired with access to the seismic and well logs.

A little transparency can go a long way...

JMHO